China Bars Glaxo Finance Chief From Leaving

BEIJING (AP) -- Drug manufacturer GlaxoSmithKline, under investigation on suspicion its employees bribed Chinese doctors, said Thursday the finance director for its local unit has been barred from leaving China.

The executive, Steve Nechelput, has not been questioned or arrested and is free to travel within China, the British company said in a statement. It said it had been aware of the travel restrictions since the end of June. Nechelput continues to work in his role as finance director for the company's China unit.

Chinese police announced this week they have detained four GSK employees on suspicion of paying bribes to doctors, hospitals and others to encourage them to prescribe the company's medications.

Police say the employees funneled as much as 3 billion yuan ($490 million) through travel agencies and consulting firms to hide the source of bribes, according to Chinese news reports. Investigators have not made clear how much of that money was paid as bribes.

The official Xinhua News Agency said the scheme appeared to be aimed at evading GSK's internal controls meant to prevent bribery.

GSK has said it opposes bribery and was cooperating with the investigation.

On Wednesday, the Chinese drug regulator launched a crackdown on misconduct in its pharmaceutical market, though it gave no indication it was linked to the GlaxoSmithKline probe.

The State Food and Drug Administration said the campaign is aimed at stamping out unauthorized drug production, improper online drug retailing and sales of fake traditional Chinese medicines.

The new Chinese leadership that took power in November has promised to improve China's health system and rein in surging costs of medicine and medical care that are fueling public frustration.

China has suffered repeated scandals over fake or shoddy medications, some of which caused deaths and injuries. Regulators have launched repeated crackdowns on false advertising and other violations, but with limited success.

Also Wednesday, a Commerce Ministry spokesman warned that Chinese and foreign drug manufacturers would face "legal sanctions" for misconduct.

Meanwhile, the Cabinet's planning agency is investigating production costs at 60 Chinese and foreign pharmaceutical manufacturers, according to state media, possibly a prelude to revising state-imposed price caps on key medications.